The United States Postal Service lost $9 billion last fiscal year. What now?

Amazon will be reducing the number of packages it ships through the United States Postal Service, the Wall Street Journal reported this week.

According to an Amazon spokesperson, “we negotiated with [USPS] in good faith for over a year to try and reach a deal that would bring them billions in revenue and believed we were heading toward an agreement, when the USPS abruptly walked away at the 11th hour and introduced the auction concept. While we’ve submitted a bid and hope to continue our partnership, even at a reduced level, we now have to prepare to meet our customers’ delivery needs regardless of the outcome of the auction."

Also this week, Postmaster General David Steiner testified before a House committee that the USPS was already struggling and could “be out of cash in less than 12 months” unless something changes. The USPS says it lost $9 billion last fiscal year.

“I remember when the average losses were $4.5 billion or $5 billion, but now the losses are increasing over time,” said Rick Geddes, founding director of the Cornell Program in Infrastructure Policy.

On the cost side, he said USPS has a universal service obligation: “It's basically to deliver the mail to every address it can six days a week.”

That can get expensive. “To have all the trucks run six days a week, to have the carriers who walk their routes,” said Geddes.

On the revenue side, lawyer and consultant Jim Campbell said letter volume has gone down precipitously, and legislation limits the postal service’s ability to raise prices.

“So a combination of the price cap and the declining volumes hit the post office quite hard,” he said.

The Postmaster General said Congress and the USPS could consider reducing the days of delivery, closing offices in rural or remote areas, raising stamp prices to $1 or more, or significant financial reforms.

But with revenues unlikely to exceed costs, Notre Dame professor James O’Rourke said Congress has to decide if it wants a postal service at all.

“We don't ask the Forest Service or the weather service to make money; they are a service to the people of the United States. It would be nice if the Postal Service could break even, or at least come close,” he said.

But that, O’Rourke noted, would take some heavy lifting on Congress’ part.

From the Marketplace archives

• From December 2024: Why is the U.S. Postal Service in the red?

• From December 2023: The plan to make USPS profitable isn’t going well

• From March 2022: How will USPS reform affect postal workers?

• From November 2021: Louis DeJoy on why he’s slowing mail and raising prices at the USPS: “We have no money”

• From October 2021: USPS pilots a public banking program

• From August 2020: Let’s get real about USPS